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Are excess contractual charges lawful

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Starting off another thread to get educated responses.


We all know about claiming back excess bank charges etc. What i wish to concentrate on are excessive charges within any financial agreement. The Office of Fair Trading decided that charges levied on an account holder for a failed direct debit as an example will no longer be challenged by the OFT if below £12.00. It would be for a court to decide


Under laws of contract, a company cannot charge any fees in excess of what it would normally amount to. A computer generated bill for £25.00 for saying a direct debit has bounced will be unacceptable and can be challenged,


What i am interested in is if the Terms and Conditions of a finance agreement say a returned direct debit charge will be £25.00.


If it is in the contract, will it be lawful under contract law, or still a penalty to reclaim ??

Will the The Unfair Terms in Consumer Contracts Regulations 1999 be the way to mount a challenge

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This is a bit complicated I think, because you will get a difference of opinion. Many Insurance companies now include various charges within their policy t&c's. If you have a Car Insurance on a monthly Direct Debit, some companies will seek to charge you £20 or £30 for a failed DD payment and may even withdraw monthly payment, requiring the remaining years premium to be paid or for the policy to be cancelled. As long as these t&c's are advised to customers up front they are found to be perfectly proper as from what I gather the FOS or OFT don't appear that interested in 'excessive' charge complaints.


On the other hand if you had a credit card or bank account over a long period of time and new t&c's were impossed with excessive charges applied, just with notice in the form of a leaflet with a statement, then I think you would have a legitimate complaint.


My non expert opinion is that it would depend on the financial product and whether you were a new or existing customer.

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I understand what you are saying but as to the Dunlop judgement


Anything above what is reasonable will be classed as a penalty


A companies own terms and conditions to not overide statutory provision or case law, so if that provision is in place in a contract, it will be unlawful as to the unfair contracts regulation


My take on it anyway, but please keep it coming people

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